Teck Resources Ltd the world second largest exporter of coal used in steelmaking focused on expanding its Canadian operations without acquisitions, even as the volume of transactions in the industry rises to the highest level in at least 12 years.
Mr Don Lindsay CEO of Teck Resources said "For us, it makes far more sense to build than to buy. It may be boring from an external point of view that there aren't lots of transactions, but it works."
Teck plans to step up the pace of extraction from the more than 5.5 billion tonnes of coal deposits it holds in Alberta and British Columbia. Mr Lindsay said building capacity in western Canada is a cheaper way to add production than buying companies such as US miner Walter Energy Inc or Australia Macarthur Coal Ltd.
According to Bloomberg data there have been 56 pending or completed takeover bids for coal producers so far this year with a combined value of about USD 21.3 billion. They include Peabody Energy Corp and ArcelorMittal agreement last month to acquire Macarthur for AUD 3.64 billion. There were 70 deals worth about USD 16.4 billion in 2010.
Walter which also mines metallurgical coal in Canada rose 21% in New York trading on September 7 after the London based Times reported Anglo American Plc may consider a bid. Walter investor Audley Capital Advisors LLP said in July that company should explore a sale. Mr Lindsay said Teck isn't interested.
He said that "Two-thirds of the business is underground, long-wall o
perations. You've seen in their performance, the squeezes that they've had. Why would I want to get into that business?"
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